 Why is it important for you to start saving now? SLID E 1

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<ul><li> Slide 1 </li> <li> Why is it important for you to start saving now? SLID E 1 </li> <li> Slide 2 </li> <li> Capital spending refers to money spent by a business for an item that will be used over a long period SLID E 2 </li> <li> Slide 3 </li> <li> Capital projects involve spending by businesses for items such as land, buildings, equipment, and new products. The money for capital projects comes from three main sources: personal savings, stock investments, and bonds. SLIDE 3 </li> <li> Slide 4 </li> <li> A major source of investment funds is personal savings. Companies use money you deposit in a bank or other financial institution. These funds provide the money necessary for buying expensive equipment or creating new products. In return, savers are paid interest on the money they deposit. The savings rate of a country is an important factor for economic growth. What capital project have you see around you? SLID E 4 </li> <li> Slide 5 </li> <li> Stock represents ownership in a corporation. Stock ownership is commonly called equity. This term means ownership. The value of your investment in a company increases if the stock price goes up in the Stock Market Research Apples stock. Highest price and lowest price. Why the fluctuation? SLID E 5 </li> <li> Slide 6 </li> <li> Another investment activity involves the sale of bonds. A bond represents debt for an organization. If you purchase a corporate or government bond, you are a creditor. This means you have lent money to the organization. In return, bondholders are paid interest for the use of their money. SLID E 6 </li> <li> Slide 7 </li> <li> A government may spend less than it takes in. When this occurs, a budget surplus is the result. If a surplus exists, government may reduce taxes or increase spending on various programs. SLID E 7 </li> <li> Slide 8 </li> <li> A government may spend more than it takes in. This situation is called a budget deficit. This can lead to higher taxes or increased borrowing by the government to fund its programs SLID E 8 </li> <li> Slide 9 </li> <li> Over time, deficits build up. The total amount owed by the federal government is called the national debt. What is our national debt at the moment? http://www.wsj.com/video/the-debt-ceiling-explained-why-you- should-care/40415F7F-C0EB-4048-9612-42A22EB77D66.html SLID E 9 </li> <li> Slide 10 </li> <li> Loans, bonds, and mortgages are common borrowing methods used by businesses. Most companies, large and small, use debt at some time. Poor debt management can result in a company going out of business. SLID E 10 </li> <li> Slide 11 </li> <li> People commonly use credit cards, auto loans, and home mortgages to finance their purchases. The use of credit can be convenient. Careful use of credit can be important for economic growth. In contrast, unwise borrowing can result in legal action and other trouble. https://www.youtube.com/watch?v=4g1sPOFupWw https://www.youtube.com/watch?v=4g1sPOFupWw https://www.youtube.com/watch?v=Ile5gOboEF4 https://www.youtube.com/watch?v=Ile5gOboEF4 SLID E 11 </li> <li> Slide 12 </li> <li> Economic challenges read and discuss Answer: What economic challenges will countries face in the future? </li> <li> Slide 13 </li> <li> Page 48 Answers questions #s 2, 5, 6, 8, 10 </li> </ul>